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NO RTH LAN D <br /> <br />SEC U RiTI ES <br /> <br />November 23, 2004 <br /> <br />Mr. Jim Norman, Administrator <br />Ms. Heidi Nelson, Assistant Administrator <br />Ms. Diana Lurid, Finance Director <br />City of Ramsey <br />15153 Nowthen Blvd NW <br />Ramsey, MN 55303 <br /> <br />Re: Financing Considerations for a City MunicipaI Center <br /> <br />Dear Jim, Heidi and Diana: <br /> <br />As you know there are basically three options to the acquisition, construction and equipping of a new <br />City Municipal Center facility: <br /> <br />General Obligation Bonds - the City has the authority to issue General Obligation Bonds <br />backed by the full faith and credit of the City. It would be necessary for the City to hold a <br />special election on this question. If the election question passes, the City has the ability to <br />issue General Obligation Bonds. The bonds would be subject to the statutory debt limit. The <br />City's current statutory debt limit margin is approximately $27,000,000. <br /> <br />Lease Purchase Revenue Bonds - the City has the authority pursuant to Minnesota Statutes, <br />Section 465.71 to acquire such a facility pursuant to a lease with option to purchase <br />agreement. The City must have the right to terminate the lease purchase agreement at the <br />end of any fiscal year during its term. Unless terminated at the end of any fiscal year the <br />lease is payable from any revenues available to the City. Under current law, if the City wants <br />the ability to levy taxes outside of levy limits to make the lease payments, the bonds must be <br />issued by an Economic Development Authority (the 'EDA") or a Housing and <br />Redevelopment Authority ("HRA") of the City. The EDA and the HRA has the authority to <br />issue revenue bonds payable solely from lease payments to be made by the City pursuant to <br />the lease purchase agregment entered into between either the EDA or the HRA and the City. <br />Under current law, a financing of this type does not require a referendum. In addition, <br />because the project cost will exceed $1.0 million, the entire lease purchase bond-financing <br />amount counts against the City's statutory debt limit. <br /> <br />General Obligation Capital Improvement Plan Bonds (NEW) -may be issued to fund lands, <br />buildings or other improvements for the purpose of a City Hall, public safety facility and public <br />works facility. These bonds would also be subject to the City's debt limit of approximately <br />$27,000,000. In addition, <br /> <br />".!orthland $ccurl~ie*,, bm. 45 5outh 7'~ Street, State 2500, Minneapolis, MN 55402 ~,,:~ :; ,: 800-851-2920 ' ~.;. 6 i2-851-5900, 612-85 i-5987 <br /> www.northlands¢curilies.com <br /> <br /> <br />